THE DOT - if this turns orange or red be alert

Friday, February 18, 2011

1 Inflationary pressures keep rising while signals for a rate hike is increasing - given the GDP expectations of the FED of roughly 4% in 2011 ( if they were real economic growth) why interest rates are kept at zero. Only one explanation where is no growth and banks are still bankrupt and keep getting the zero interest infusions to make them look alive while they still get robbed within as the average personal cost which is mostly bonus pays is around 50%. That is systematic theft from savers to greedy banksters and their dear friends in DC.

China continues to joust with windmills as its latest attempt to counter inflation, a 50 bps RRR hike, is now history, and will be just as successful as all of its previous RRR, and interest rate hikes at rebuffing gentle Ben's attempt at genociding a few hundred million additional serfs. Luckily for now the "silver for rice" trade continues, keeping a lid on rice prices. Indicatively, as we showed previously, neither interest rate hikes nor RRR have any impact on the Chinese market whatsoever, confirming that the only source of global liquidity that matters resides in the Marriner Eccles building.

The one thing that nobody is conveniently talking about that has suddenly become a big flash red light, the surge in borrowing on the ECB's Marginal Lending Facility which we noted yesterday, continues for the second day in a row, removing all speculation of this being a technical or calendar glitch, and confirming that some financial entity in Europe has entered its death rattle. Today, the ECB announced that after borrowing €15.8 billion in overnight liquidity, the highest since the program's inception in 2009, we got another increase in borrowing, this time at €16 billion in overnight liquidity needs. With expectations that this borrowing surge at a last resort rate of 1.25% would normalize disappearing, we are surprised the reaction in the EUR is not far greater: the EURUSD did contract modestly overnight, but if this is indeed the proverbial first domino we would be very concerned about the long term prospects of the European currency. What is most concerning is that after revelations of check kiting at Irish banks yesterday, which confirms that banks are using a legalized ponzi scheme to literally print each other money, that some bank - any bank - will need to resort to such a high rate source of overnight capital. As European collateral has no quality thresholds, and as the ECB will accept anything, it makes no sense for any bank to pay incremental interest just to transfer borrowing to an overnight facility with a punitive rate - simple as that. If this continues for a third day on Monday, it may well be time to follow Hugh Hendry's advice, and panic.

2. We have reached the Full Moon and 23rd clash pattern time window for the top and even if DC keeps Steve Jobs alive by having him attending a 'ghost-meeting' nobody saw him at - Apple and the NDX are now very vulnerable which will very soon drag the whole market down. The tensions in the Middle East are beyond any control now at the Peace Noble price winning president does not live up to any standard which would make him deserve such an honor in this global charade of democracy. Which Iran can now explore fully to its benefit and weaken Israels influence in this region - markets are slow to react so far as they want it to go higher no matter want in their manipulation scam to dump some overpriced useless facebook stocks o the public while banks keep stealing money from Mainstreet.It is about time people rise up against all their corrupt governments as they have not changed anything but making it even easier for the grand big theft globally.

excerpt

Bahrainis Urge Democracy as Crowds Swell; Protests Spread

A Bahraini Shiite woman holds a signs that reads in Arabic 'We sacrifice our souls and blood for martyrs' during the funeral of two men who were killed the day before during violent police raid on anti-regime protesters, in the village of Sitra, east of Manama on Feb. 18, 2011. Source: AFP/Getty Images

Feb. 18 (Bloomberg) -- John Sfakianakis, chief economist at Banque Saudi Fransi, discusses the impact of civil unrest in parts of the Middle East on the price of oil. He speaks from Riyadh with Linzie Janis on Bloomberg Television's "Global Connection." (Source: Bloomberg)

Bahraini army tanks take position near Pearl Square in Manama, Bahrain. Photographer: Joseph Eid/AFP/Getty Images

A wounded Shiite Bahraini demonstrator is taken to a hospital in Manama after beign assaulted by riot police. Photographer: Joseph Eid/AFP/Getty Images

A senior leader of Bahrain’s Shiites said the government must resign and parliament shut down pending a transition to democracy in an address to the biggest crowd in five days of protests as unrest spread to Libyaand Yemen.

Abdulwahab Hussain told more than 10,000 demonstrators in front of a mosque in Sitra, south of the capital, Manama, that the minister of the interior should be tried after at least five people were killed in a police crackdown on the protests. “The government is unstable,” he said. “The police can’t break the will of the people.”

Earlier, thousands of mostly Shiite Muslims attended the funeral of two protesters, hugging their coffins and shouting: “We sacrifice for Bahrain.” Government supporters staged counter-demonstrations in Manama today.

The dissent in the Persian Gulf island state that is home to the U.S. Navy’s Fifth Fleet follows the toppling of autocratic rulers by popular movements in Egypt andTunisia and marks the spread of dissent into the Persian Gulf, where most of the Middle East’s oil is produced. The past week has also seen anti-government protests and clashes in Libya, Africa’s biggest holder of crude oil reserves, and Yemen, a producer of liquefied natural gas. Brent crude futures this week rose to the highest level since 2008.

In Yemen, the biggest crowd since protests began more than a week ago gathered to demand the ouster of Ali Abdullah Saleh, president for three decades, and police and government supporters attacked demonstrators with stones and batons.

In Libya, opponents of Muammar Qaddafi, in power for more than 40 years, camped out in the eastern port city of Benghazi preparing for further protests, after clashes in several cities yesterday left a reported 24 people dead, the Associated Press said.

Government Supporters

Supporters of Bahrain’s government drove their cars near the U.S. Navy headquarters in Manama, waving the national flag and pictures of the royal family.

Bahrain’s Shiites make up some 60 to 70 percent of the population, which is about 740,000 according to the CIA World Factbook. They claim discrimination by the country’s Sunni ruling family and its supporters.

The army fired teargas, buckshot and rubber bullets in an overnight crackdown yesterday, targeting a crowd of protesters gathered at the Pearl Roundabout in Manama calling for a constitutional monarchy and a change of government in the Shiite-majority country ruled by Sunni royals. Prime Minister Sheikh Khalifa bin Salman Al Khalifa, the focus of the demonstrators’ demands, has held the office for four decades.

‘Without Any Warning’

“They started firing from the bridge without any warning, then they started firing from their cars,” said Hussein Ali, 42, who was at a rally site at 3 a.m. yesterday when security forces arrived. “There were women and children in tents. I saw cars running over tents. It was terrifying, a nightmare. Small children and women were falling over.”

The police attack “has broke up and fragmented protests, but you could still get people who aren’t broken and find another catalytic moment,” said Scott Lucas, professor of American Studies at the University of Birmingham in England. “They just need to find a gathering point.”

In Libya, 24 have been killed at protests this week in five Libyan cities demanding the government’s overthrow, New York- based Human Rights Watch said in a statement. The deaths were in the second- and third-largest cities, Benghazi and Beyida, according to Al Arabiya television.

There is an absence of independent reporting due to Libya’s tight press restrictions and activists used the Internet and social media to call for yesterday’s “Day of Anger” rally. Qaddafi has ruled since 1969 while tolerating no dissent.

Gunfire in Yemen

Gunfire broke out in Yemen’s capital, Sanaa, on the eighth straight day of anti-government demonstrations. More than 20,000 protesters streamed out of Friday prayers toward the presidential palace, overwhelming police efforts to contain them. “After Mubarak, Ali,” they chanted, calling on President Ali Abdullah Saleh to quit.

Saleh said this month he won’t seek another term when the current one ends in 2013. “A number” of people have been killed since demonstrations began, the official Saba news agency said yesterday, without elaborating.

Bahrain’s authorities said the intervention by security forces was necessary to restore order.

“The country was on the brink of a sectarian abyss,” Foreign Minister Sheikh Khalid bin Ahmed Al Khalifa said at a press conference yesterday. “It was a very important step that had to happen. Police took every care possible.”